Streaming giant Netflix is going through some changes. In addition to the previously announced and released ad-supported tier, Netflix co-CEO Ted Sarandos has spilled the beans on the company’s business strategy moving forward, and it currently involves no sports and includes upcoming additional ad tiers.
Variety’s reporting that Sarandos says they have no intention of including sports in their portfolio of offerings, which is an interesting choice as fellow streamers like Amazon, Apple, and even Google are duking it out to secure a contract with the NFL for their Sunday Ticket Package. Netflix competitor Amazon Prime Video is currently home to NFL’s Thursday Night Football, a $1 billion per year price tag that is apparently paying off.
Sarandos, speaking at the UBS Global TMT Conference in New York City yesterday explained that live sports doesn’t make sense for the streaming business model as the programming is more suited for paid TV. Sarandos said the streaming service “can get twice as big without sports.”
“We’ve not seen a profit path to renting big sports,” Sarandos said at the conference. “We’re not anti-sports, we’re just pro-profit.”
Netflix might be missing the opportunity for some serious cash flow, especially considering Amazon’s success with hosting live football, and the streaming giant could be looking to make a profit elsewhere—like additional ad-tiers. According to CNBC, Sarandos also said yesterday that Netflix is looking to offer more than just one ad-supported tier, Netflix with ads, which launched this past November for $6.99.
“We have multiple tiers today, so it’s likely we’ll have multiple ad tiers over time, but nothing to talk about yet,” Sarandos said. “And the product itself will evolve, I suspect, pretty dramatically, but slowly, gradually.”
Netflix itself has been forced to evolve after the service has seen increased competition from the likes of Hulu, HBO Max, and Amazon Prime Video. Earlier this year, the company hit some of its first economic turmoil as subscribers and company stock value dipped, which fellow CEO Reed Hastings blamed on password sharing and the war in Ukraine.